Iraqis Warn U.S. Plan to Divert Billions to Security Could Cut Off Crucial Services

BAGHDAD, Iraq, Sept. 20 - Iraqi officials in charge of rebuilding their country's shattered and decrepit infrastructure are warning that the Bush administration's plan to divert $3.46 billion from water, sewage, electricity and other reconstruction projects to security could leave many people without the crucial services that generally form the backbone of a stable and functioning democracy.

Under the plan, which was proposed last week and would require approval by Congress, the money would pay for training and equipping tens of thousands of additional police officers, border patrol agents and Iraqi national guardsmen in an attempt to restore order to a land where lawlessness and violence have replaced Saddam Hussein's repression since the American-led invasion last year.

But the move comes as a grievous disappointment to Iraqi officials who had already seen the billions once promised them tied up for months by American regulations and planning committees, consumed by administrative overhead and set aside for the enormous costs of ensuring safety for the workers and engineers who will actually build the new sewers, water plants and electrical generators. Of the $18.4 billion that Congress approved last fall for Iraq's reconstruction, only about $1 billion has been spent so far.

"Nobody believes this will benefit Iraq," said Kamil N. Chadirji, deputy minister for administration and financial affairs in the Iraqi Ministry of Municipalities and Public Works, which has responsibility for water and sewage projects outside Baghdad.

The decision to shift the money, which had been earmarked for rebuilding everything from roads and bridges to telecommunications and the outdated equipment pumping oil, appears to signal an abandonment of the administration's original plan for putting Iraq back on its feet as a functioning nation.

In the original view, restoring Iraq's physical infrastructure assumed an importance equaled only by the American-led military action in creating a stable democratic country and winning the sympathies of ordinary citizens. Propounded again and again by L. Paul Bremer III, the top American civilian administrator here until an Iraqi government took over on June 28, that approach assumed that once the conduits for electricity, water, sewage, oil and information were in place, an efflorescence of industrial and national institutions would follow.

But with little actually being built and the deteriorating security situation making it doubtful that anything dramatic would happen if it were, a much more conventional set of nation-building priorities were put in place with the arrival last June of John D. Negroponte, the United States ambassador to Iraq. Those priorities are security, economic development and democracy building.

Somewhere implicit in the economic peg of this three-legged stool is the concept, much demoted, of physical reconstruction. And even then, said officials at the United States Embassy in Baghdad, the rebuilding is best done not by Americans but by Iraqis, who can not only hone their construction skills but also do the work more cheaply.

"It doesn't matter what we build," a senior embassy official said in a succinct expression of the new principles. "In the end, it's got to be an Iraqi solution."

"I feel a lot better about this mission than I did about 'rebuilding Iraq,"' the official said. When asked why, the official said, "Because this one makes sense."

William B. Taylor Jr., director of the Iraq Reconstruction Management Office at the embassy, said the change represented something more akin to a shift in emphasis rather than a complete reordering of priorities.

He said some or all of the diverted financing could be restored if Congress decided to allocate more money to reconstruction in a future budget or if other countries provided donations.

The shift would take $1.07 billion out of the electricity sector's original allocation of $5.54 billion. Dr. Moayed al-Maayouf, director general for studies and planning at the Iraqi Ministry of Electricity, said he was puzzled that nearly all the cuts in his sector would affect work at power plants -- a technically difficult, long-term affair whose disruption would affect his planning for years.

Dr. Maayouf said he had not been consulted on the plan, but embassy officials said discussions might have occurred at higher levels in his ministry. In any case, even with the cuts, the ministry should be able to meet its goals for increasing electrical output over the next year, Dr. Maayouf said.

Clearly the most severe impact would be felt in the area of water and sewage, which would have its budget cut to $2.21 billion from $4.15 billion. With the insurgency in Iraq, the estimated cost of providing security for the projects had already tripled -- from 10 percent to 30 percent of each construction contract -- and had forced dozens of projects to shrink in size or be eliminated.

Now, Mahmood A. Ahmed, director general of water at the public works ministry, said that of an original list of about 100 projects, he knew of only four that are scheduled to start even in the next few months.

Mr. Chadirji, the deputy minister, said fewer than 30 of the original projects, which include municipal drinking water and sewage systems in towns across Iraq, were assured of surviving in the long run.

"We tell them, please, the problem is big, and let's work faster," Mr. Ahmed said. "And we must have a result."

In another indication of new American priorities in Baghdad, some money was also shifted away from the major public works projects to small-scale initiatives in economic reform, private sector development, agriculture and higher education.

Mr. Taylor, in a bit of wry humor, explained why water and electricity were tapped for all these programs by citing Willie Sutton, who said that he robbed banks because that was where the money was.